Japan's Softbank In Talks To Acquire Sprint Nextel - InformationWeek
Mobile // Mobile Devices
11:55 AM
Connect Directly

Japan's Softbank In Talks To Acquire Sprint Nextel

On the heels of the T-Mobile and MetroPCS merger, SoftBank--Japan's financial-services company and number-three wireless carrier within that country--is rumored to be in talks to buy a majority stake in U.S. mobile operator Sprint Nextel.

SoftBank, Japan's financial-services company and the number-three wireless carrier in that country, is rumored to be in talks to buy a majority stake in U.S. mobile operator Sprint Nextel, according to Reuters and the Nikkei Business Daily.

Neither company has confirmed talks are under way, but shares for Sprint Nextel took a jump on the news, up to $5.80 by midday. One possible price, as quoted by The Verge, for acquiring two-thirds of Sprint Nextel's stock, is $19.2 billion.

SoftBank's track record for acquisitions is mixed. It was widely reviled for its purchases of the COMDEX trade show and Ziff Davis, but it did purchase another Japanese wireless carrier, Vodafone Japan, and help revitalize its place in that country's wireless market after rebranding it as SoftBank Mobile.

The SoftBank Sprint deal comes hot on the heels of T-Mobile planning a purchase of MetroPCS, most likely to allow both companies a stake in building more 4G LTE spectrum. MetroPCS almost had a buyer in Sprint earlier this year, but Sprint's board decided not to go through with the deal. Others pointed out how incompatibilities between the two company's wireless standards--Sprint's GSM and MetroPCS's CDMA--would have been a problem.

It's unclear what specific changes SoftBank would make once it acquires its majority share of Sprint, but SoftBank also is apparently seeking to control Clearwire, the wireless high-speed Internet provider Sprint also owns a 49% stake in.

Most of Clearwire's 4G and WiMAX network business is through resellers rather than direct customers. Comcast and Time Warner Cable resell Clearwire access via various mobile-broadband packages. To that end, the Sprint sale could affect many other wireless customers who have no direct connection to Clearwire, or Sprint. Clearwire's stock jumped almost 30%, to around $1.80 by midday, when the news broke.

SoftBank might also be interested in other methods of resale for Clearwire's spectrum, some of which is being used to build an LTE variant called TDD-LTE that is also used in Japan--another reason why it might be appealing to SoftBank.

Sprint has been on the rocks for some time, especially after its 2005 merger with Nextel Communications, but has perked up a bit thanks in part to it being one of the U.S. carriers that offers Apple's iPhone. Sprint's also working to modernize its network, in big part by ditching Nextel's legacy iDEN network and replacing it with LTE.

Comment  | 
Print  | 
More Insights
Threaded  |  Newest First  |  Oldest First
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of the Cloud Report
As the use of public cloud becomes a given, IT leaders must navigate the transition and advocate for management tools or architectures that allow them to realize the benefits they seek. Download this report to explore the issues and how to best leverage the cloud moving forward.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of November 6, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll